Regulators close 3 more U.S. banks

JoanE. Solsman

U.S. regulators Friday announced the collapse of two more banks in Florida, one of the most failure-plagued states in the country this year, as well as a failure in Colorado.

The Federal Deposit Insurance Corp. said Florida's LandMark Bank and Southshore Community Bank were closed by the state's office of financial regulation. Tampa's American Momentum Bank agreed to take over both as part of purchase-and-assumption agreements with the FDIC. Florida has the second highest amount of bank failures this year with nine after Georgia's 16.

Also Friday, the FDIC said Colorado's Division of Banking shuttered Bank of Choice in Greeley, Colo. Its 17 branches will become part of Bank Midwest NA of Kansas City, Mo., and it represents Colorado's fifth failure this year.

Overall, U.S. bank failures have slowed in 2011 from the flood of recent years, and smaller community banks--like those that failed in Florida Friday--predominate the ranks. However, a backlog of remaining stressed banks is expected to keep the failure rate relatively high for some time.

Bank of Choice, at $1.07 billion in total assets and $924.9 million in deposits as of March 31, is one of the largest banks to fail this year. Only three other banks with more assets have failed in 2011. In addition to assuming all of the deposits, Bank Midwest agreed to purchase about $853 million of the assets.

Meanwhile, LandMark Bank of Florida had about $275 million in total assets and $246.7 million in total deposits with six branches. Southshore Community Bank had about $46.3 million in total assets and $45.3 million in total deposits with two branches.

The FDIC estimated that the cost of the failures to the Deposit Insurance Fund would be $256.3 million.

Depositors of the failed banks will automatically become depositors of the new banks and deposits will continue to be insured by the FDIC. The FDIC insures deposits for up to $250,000 per depositor.

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